GV Now

Current business trends are flat

Posted on January 07, 2013

The greater Grand Rapids industrial economy has returned to “almost flat,” according to the results of a monthly survey compiled by Brian G. Long, director of Supply Management Research in the Seidman College of Business at Grand Valley State University.

The survey results are based on data collected during the last two weeks of December.

The survey’s index of business improvement, called new orders, came in at +4, considerably lower than the +17 reported last month. The production index backtracked a little as well, remaining positive but coming down to +11 from +21. Activity in purchasing offices picked up slightly to +11 from +8. In a similar move, the employment index rose to +14 from +13.

“We’ve returned to an unimpressive growth pattern,” said Long. “Despite the optimism of our November report, December and 2012 ended rather flat.”

Long said December was a little slower month than expected for the office furniture business. “The specialty furniture firms did not have a good month at all,” he said. “The auto parts suppliers remain positive, but with a couple exceptions, continue to show signs of topping out. The capital equipment firms were widely mixed, probably because of the volatile nature of year-end activity. For industrial distributors, once again the performance came in mixed, although the bias was still to the upside.”

Long said he doesn’t predict a recession but said 2013 will be a year of “leveling out” with some months recording negative numbers.

The Institute for Supply Management survey is a monthly survey of business conditions that includes 45 purchasing managers in the greater Grand Rapids area and 25 in Kalamazoo. The respondents are from the region’s major industrial manufacturers, distributors and industrial service organizations. It is patterned after a nationwide survey conducted by the Institute for Supply Management. Each month, the respondents are asked to rate eight factors as “same,” “up” or “down.” An expanded version of this report and details of the methodology used to compile it are available at www.gvsu.edu/scblogistics.